BRUSSELS (MNI) - Irish bond spreads Wednesday hit their widest level since the start of European Monetary Union as traders speculated that the country won't be able to manage its large budget deficit, exacerbated by the expensive problems of its troubled banking system.

The Irish government is meeting on Wednesday to debate the future of Anglo Irish Bank after saying on Tuesday that it would keep the bank on state funded life-support until the end of the year.

BRUSSELS (MNI) - Eurozone banks can't depend on the European Central Bank's exceptional measures forever and the central bank is likely to continue to withdraw the support next year, National Bank of Belgium Governor Guy Quaden said in an interview published by a Belgian national newspaper on Wednesday.

SINGAPORE, Sept. 8 (MNI) - Dollar-yen hit a new 15-year low, sending Japanese stocks down sharply, in a generally quiet market after the release of stronger-than-expected machinery orders for July, although a stream of policymaker comments on the currency was keeping trade in check.

Japan's core private-sector machinery orders surged by a seasonally adjusted 8.8% in July from the previous month, posting the second straight m/m rise after rising 1.6% in June and slumping 9.1% in May, the Cabinet Office said on Wednesday.

XIAMEN, Fujian Province (MNI) - There are no signals suggesting sharp yuan volatility, Minister of Commerce Chen Deming told reporters here today.

"I haven't seen any signs of large-scale volatility," he said.

Chen also said that the forces of supply and demand will decide the exchange rate. He said that China will continue to reform the exchange rate formation mechanism.

"We need to maintain economic stability and currency stability," he said.

BEIJING (MNI) - China bought Y640.8 billion in short-term Japanese bills in July, according to data published by Japan's Ministry of Finance on Wednesday.

China's net holdings stood at Y583 billion versus Y456.7 billion the previous month.

However, China also sold Y57.7 billion in medium- to long-term Japanese bonds in July.

By Vicki Schmelzer

NEW YORK (MNI) - Financial market sentiment can change on a dime, as evidenced by the "risk-on" environment seen the Friday before the U.S. Labor Day holiday and the decidedly "risk-off" environment seen Tuesday following the long holiday weekend.

Whereas Friday the market cheered a better-than-expected U.S. non-farm payrolls and upbeat China purchasing managers reports, players Tuesday were troubled by eurozone peripheral debt woes.

BRUSSELS (MNI) - Restoring confidence in Ireland's banking system is the key to restoring investor confidence, Irish finance minister Brian Lenihan said on Tuesday.

The minister was talking just after his government announced that its guarantees for short term bank liabilities, including corporate and interbank deposits as well as debt securities, would be extended from the current expiry date of September 29 to December 31 2010.

BRUSSELS (MNI) - Eurozone finance ministers are happy with the progress that Greece is making on its austerity plans, Eurogroup chief Jean-Claude Juncker said on Tuesday.

"We are happy that Greece is on a good track," Juncker told reporters after a meeting here of finance ministers from the 16 countries that share the euro.